GOVERNMENT 

EFFICIENCY AND 

EFFECTIVENESS

Views on the Progress and 

Plans for Addressing 

Government-wide 

Management Challenges

Statement of Gene L. Dodaro 

Comptroller General of the United States

Testimony 

Before the Committee on Homeland 

Security and Governmental Affairs, 

U.S. Senate

For Release on Delivery 

Expected at 9:00 a.m. EDT

Wednesday, March 12, 2014

GAO-14-436T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-436T, a testimony 

before the Committee on Homeland Security 

and Governmental Affairs, U.S. Senate

March 12, 2014

GOVERNMENT EFFICIENCY AND 

EFFECTIVENESS

Views on the Progress and Plans for Addressing 

Government-wide Management Challenges

Why GAO Did This Study

The federal government is one of the 

world’s largest and most diverse

entities, with about $3.5 trillion in 

outlays in fiscal year 2013, funding an 

extensive array of programs and 

operations. Moreover, it faces a 

number of significant fiscal, 

management, and governance 

challenges in responding to the varied

and increasingly complex issues it 

seeks to address.

This statement focuses on (1) GAO’s 

work related to the President’s 

Management Agenda, and (2) 

additional opportunities for decision 

makers to address major management 

challenges.

This statement is primarily based upon 

our published and ongoing work

covering GAO’s High Risk List; 

fragmentation, overlap, and duplication

reports; and managing for results work. 

The work upon which these published 

reports and preliminary findings were 

based was conducted in accordance 

with generally accepted government 

auditing standards.

GAO has made numerous 

recommendations to OMB and 

executive branch agencies in these 

areas and reports in this statement on 

the status of selected key 

recommendations.

What GAO Found

A number of areas on the President’s Management Agenda are consistent with 

issues highlighted by GAO’s work on the High Risk Program, its annual reports 

on fragmentation, overlap, and duplication, and other work related to longstanding management challenges. These include, for example: using information 

technology to better manage for results; addressing improper payments;

expanding strategic sourcing; strengthening strategic human capital 

management; and improving the Department of Defense’s weapon systems and 

services acquisitions. Lasting success in addressing the difficult and 

longstanding issues on the Presidents Management Agenda will hinge on 

effective implementation, including sustained top leadership attention. GAO and 

the Office of Management and Budget (OMB) have agreed to hold a series of 

high level meetings on the issues on GAO’s High Risk List to discuss progress 

and actions that are needed to fully address high-risk issues. Further, the 

executive branch has taken a number of steps to implement key provisions of the 

GPRA Modernization Act by developing cross-agency and agency priority goals; 

assigning performance management roles and responsibilities to leadership; 

conducting agency quarterly performance reviews; and developing

Performance.gov, a website that provides quarterly updates on the priority goals.

However, additional opportunities exist for decision makers to address major 

performance management challenges, including, for example:

Developing a comprehensive inventory of federal programs. GAO’s preliminary 

review of the program inventories produced by 24 large federal agencies 

identified concerns about the usefulness of the information provided in these 

inventories for addressing crosscutting issues.

Enhancing the use of collaborative mechanisms. Addressing many of the 

challenges government faces requires collaboration across agencies, levels of 

government, or sectors. Yet the mechanisms the federal government uses to 

collaborate do not always operate effectively.

Effectively implementing strategic reviews. Starting in 2014, agency leaders are 

to annually assess how relevant organizations, programs, and activities, both 

within and outside of their agencies, are contributing to progress on their 

strategic objectives and identify corrective actions where progress is lagging. 

Such reviews could help address fragmentation, overlap, and duplication issues.

Improving capacity to gather and use better performance information. GAO’s

work has found that federal decision makers often lack complete and reliable 

performance data needed to address the government’s management challenges.

Furthermore, the administration needs to accelerate progress in (1) addressing 

major impediments preventing GAO from rendering an opinion on the U.S. 

government’s consolidated financial statements and risks to the government’s 

future financial condition; (2) elevating top leadership attention to the areas 

identified in our annual reports on fragmentation, overlap, and duplication; and 

(3) responding to pressing challenges with its cybersecurity, such as evolving 

cyber threats to systems supporting government operations and critical 

infrastructure. Congress also has key roles in addressing each of these issues.

View GAO-14-436T. For more information, 

contact J. Christopher Mihm at (202) 512-6806 

or mihmj@gao.gov.
Page 1 GAO-14-436T 

Chairman Carper, Ranking Member Dr. Coburn, and Members of the 

Committee:

I am pleased to be here today to discuss efforts under way to address 

major management challenges facing the federal government, as well as 

opportunities for the administration and Congress to make further 

progress moving forward. The federal government is one of the world’s 

largest and most diverse entities, with about $3.5 trillion in outlays in fiscal 

year 2013, funding an extensive array of programs and operations. In 

responding to the varied and increasingly complex issues the federal 

government seeks to address, it faces a number of significant fiscal, 

management, and governance challenges.

My statement today focuses on (1) GAO’s work related to the President’s 

Management Agenda, and (2) additional opportunities for decision 

makers to address major management challenges. My comments are 

primarily based upon our published and ongoing work covering GAO’s 

High Risk List;1 fragmentation, overlap and duplication reports;2 and 

managing for results work.3 The work upon which these published reports 

and preliminary findings were based was conducted in accordance with 

generally accepted government auditing standards.

 1

For our most recent report, see GAO, High-Risk Series: An Update, GAO-13-283

(Washington, D.C.: February 2013). For additional information, see our High Risk List key 

issues page at http://www.gao.gov/highrisk/overview. 

2

See GAO, 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and 

Duplication and Achieve Other Financial Benefits, GAO-13-279SP (Washington, D.C.: 

Apr. 9, 2013); 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington 

D.C.: Feb. 28, 2012); and Opportunities to Reduce Potential Duplication in Government 

Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: 

Mar. 1, 2011). For additional information, see our Duplication and Cost Savings key issues 

page at http://www.gao.gov/duplication/overview. 

3

See, for example, GAO, Managing for Results: Implementation Approaches Used to 

Enhance Collaboration in Interagency Groups, GAO-14-220 (Washington, D.C.: Feb.14, 

2014), and Managing For Results: Executive Branch Should More Fully Implement the 

GPRA Modernization Act to Address Pressing Governance Challenges, GAO-13-518

(Washington, D.C.: June 26, 2013). For additional information, see our Managing for 

Results in Government key issues page at 

http://www.gao.gov/key_issues/managing_for_results_in_government. 
Page 2 GAO-14-436T 

A number of areas on the President’s Management Agenda are 

consistent with issues highlighted by our work on the High Risk Program, 

our annual reports on fragmentation, overlap, and duplication, and other 

work related to long-standing management challenges. Over the years, 

we have made hundreds of recommendations to address these issues. 

The current and prior administrations have taken actions to address many 

of these recommendations, and have made progress in many areas.

Much more, however, remains to be done. Lasting solutions to remaining 

issues offer the potential to save billions of dollars, dramatically improve 

service to the American public, and strengthen public confidence and 

trust in the performance and accountability of our national government. 

Examples of where the President’s Management Agenda and our work 

are consistent include:

• Using information technology (IT) to better manage for results.

The government invests about $80 billion annually in IT. Improving the 

transparency of about 700 major IT investments with the IT 

Dashboard can help focus attention on troubled projects. In addition,

holding executive reviews, known as TechStat sessions, of selected 

investments that are not producing results has resulted in positive 

outcomes such as accelerated delivery, reduced scope, and 

termination. We have made recommendations to improve the 

accuracy and use of the IT Dashboard and for the Office of 

Management and Budget (OMB) and agencies to hold more TechStat 

sessions.4 OMB has generally concurred with our Dashboard 

recommendations and has taken actions such as improving the 

accuracy of the reported investment cost and schedule data. OMB 

also agreed with our recommendation to hold more TechStat sessions 

and stated that OMB and the agencies were taking appropriate steps 

to meet that recommendation.

Other IT initiatives such as PortfolioStat and Data Center 

Consolidation can eliminate duplicative investments and close 

hundreds of centers, resulting in billions in savings.5 For example, we 

 4

GAO, IT Dashboard: Agencies Are Managing Investment Risk, but Related Ratings Need 

to Be More Accurate and Available, GAO-14-64 (Washington, D.C.: Dec. 12, 2013) and 

Information Technology: Additional Executive Review Sessions Needed to Address 

Troubled Projects, GAO-13-524 (Washington, D.C.: Jun. 13, 2013). 

5

GAO-13-279SP and GAO-12-342SP.

The President’s 

Management Agenda 

Covers Many Areas 

Highlighted by GAO 

as Needing Attention
Page 3 GAO-14-436T 

recently reported that the PortfolioStat initiative has the potential to 

save between $5.8 and $7.9 billion.6 We have made multiple 

recommendations to OMB and agencies to more fully implement and 

report on eliminating duplicative and inefficient IT investments.7 OMB 

agreed with some of these recommendations and subsequently 

clarified its guidance on how agencies should identify potentially 

duplicative investments. Further, agencies have also generally agreed 

with our recommendations and taken steps such as conducting 

portfolio reviews to identify duplicative investments and report those 

results via the IT Dashboard.

• Addressing improper payments. The federal government serves as 

the steward of taxpayer dollars and should safeguard them against 

improper payments. The President’s Management Agenda is 

consistent with our prior reporting that predictive analytic technologies 

can help agencies better identify and prevent improper payments.8

Further, OMB reported that it plans to develop more detailed 

categories of improper payments, which can help agencies tailor 

corrective action plans to better address the root causes of improper 

payments.

In fiscal year 2013, estimated governmentwide improper payments 

totaled approximately $106 billion; however, this may not cover the full 

extent of improper payments throughout the federal government. In 

order to determine the full extent of improper payments 

governmentwide and to more effectively reduce and recover them, 

continued attention is needed to (1) adopt sound risk assessment and 

improper payment estimation methodologies and (2) develop effective 

 6

GAO, Information Technology: Additional OMB and Agency Actions Are Needed to 

Achieve Portfolio Savings, GAO-14-65 (Washington, D.C.: Nov. 6, 2013). 

7

GAO, Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost 

Savings Goal, GAO-13-378 (Washington, D.C.: Apr. 23, 2013); Information Technology: 

Departments of Defense and Energy Need to Address Potentially Duplicative Investments, 

GAO-12-241 (Washington, D.C.: Feb. 17, 2012); and Information Technology: OMB 

Needs to Improve Its Guidance on IT Investments, GAO-11-826 (Washington, D.C.: Sep. 

29, 2011).

8

GAO, Improper Payments: Moving Forward with Governmentwide Reduction Strategies, 

GAO-12-405T (Washington, D.C.: Feb. 7, 2012). 
Page 4 GAO-14-436T 

corrective action plans and preventive and detective controls to 

address the root causes of improper payments.9

• Expanding strategic sourcing. One area that could yield significant 

cost savings is the expanded use of strategic sourcing, a process that 

moves away from numerous individual procurements to a broader 

aggregate approach. Our work has found that federal agencies could 

better leverage their buying power and achieve additional savings by 

directing more procurement spending to existing strategic sourcing 

contracts and further expanding strategic sourcing practices to their 

highest spending procurement categories.10 For example, most 

agencies’ efforts do not address their highest spending areas such as 

services.

We estimated that savings of one percent from selected large 

agencies’ procurement spending alone would equate to over $4 

billion. In that regard, the President’s Management Agenda calls on 

federal agencies to expand the use of strategic sourcing to better 

leverage the government’s buying power and reduce contract 

duplication. It did not, however, lay out specific governmentwide 

metrics or savings goals. We had previously recommended that OMB 

establish additional metrics to measure progress toward goals. OMB 

has efforts underway to address this recommendation.11

• Strengthening strategic human capital management. Consistent 

with the President’s Management Agenda goal to attract and retain a 

talented workforce, foster a culture of excellence, and invest in the 

Senior Executive Service (SES), we have reported that addressing 

complex challenges such as homeland security, economic stability, 

and other national priorities requires a high-quality workforce able to 

work seamlessly with other agencies, levels of government, and 

across sectors. Strategic human capital management has been on our 

High Risk List since 2001.12

 9

Improper payments contribute to the issues identified in certain areas on our High Risk 

List, such as DOD Financial Management and the Medicare and Medicaid programs. See 

GAO-13-283. 

10GAO-13-279SP.

11GAO, Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual 

Procurement Costs, GAO-12-919 (Washington, D.C.: Sep. 20, 2012). 

12GAO-13-283.
Page 5 GAO-14-436T 

Since then, as a result of actions taken by Congress, the Office of 

Personnel Management, and individual agencies, important progress 

has been made. Still, additional efforts are needed in such areas as 

human capital planning, building results-oriented cultures, and talent 

management,13 such as (1) addressing government-wide and agencyspecific skill gaps and enhancing workforce diversity, (2) 

strengthening performance management systems to improve the “line 

of sight” between individual performance and organizational 

outcomes,14 and (3) fully assessing the costs and benefits of SES 

training.15

• Improving the Department of Defense’s (DOD) weapons systems 

and services acquisition. The President’s Management Agenda is 

consistent with our findings and recommendations on improving the 

Department of Defense’s (DOD) acquisition of weapon systems and 

services, issues that have been on GAO’s High Risk List since the 

1990s. DOD has made some progress in this area.16 Over the past 

several years it has decreased the size of its major defense 

acquisition program portfolio as well as its estimated total cost; 

however, programs continue to experience cost growth over time. 

DOD has launched its “Better Buying Power” initiatives to achieve 

more efficiency and reduce cost growth.

We have tracked implementation of some of these initiatives and 

found that DOD has largely been successful in implementing its 

“should-cost” effort to lower contract prices during negotiations and 

has reported near-term cost savings as a result. DOD has had less 

success in implementing affordability constraints—which limit a 

program’s total cost throughout its lifecycle—an initiative that has the 

 13GAO, Human Capital Management: Effectively Implementing Reforms and Closing 

Critical Skills Gaps Are Key to Addressing Federal Workforce Challenges, GAO-12-1023T

(Washington, D.C.: Sep. 19, 2012).

14GAO, Results-Oriented Management: Opportunities Exist for Refining the Oversight and 

Implementation of the Senior Executive Performance-Based Pay System, GAO-09-82

(Washington, D.C.: Nov. 21, 2008).

15 GAO, Human Capital: Agencies Should More Fully Evaluate the Costs and Benefits of 

Executive Training, GAO-14-132 (Washington, D.C.: Jan. 31, 2014).

16GAO-13-283. 
Page 6 GAO-14-436T 

potential for long-term savings if implemented effectively.17 Similarly, 

we have found that DOD has made mixed progress in improving its 

acquisition of services.

18 DOD leadership has demonstrated a 

commitment to improving service acquisitions and management, but 

the department’s efforts are hindered, in part, by limited knowledge 

and baseline data on the current state of service acquisitions and the 

absence of goals and metrics to assess its progress. We have 

ongoing reviews to help improve the efficiency of DOD’s weapon 

system acquisition process and the effectiveness of its portfolio 

management practices that we believe will further the administration’s 

and Congress’ efforts in this area.19

Lasting success in addressing the difficult and longstanding issues on the 

President’s Management Agenda will hinge on effective implementation, 

including sustained top leadership attention. For example, our work has 

shown that there are five key factors that are essential to resolving highrisk issues:

1. a demonstrated strong commitment to, and top leadership support for, 

addressing problems;

2. the capacity to address problems;

3. a corrective action plan;

4. a program to monitor corrective measures; and

5. demonstrated progress in implementing corrective measures.

Top administration officials have continued to show their commitment to 

ensuring that significant management challenges, including those on the 

High Risk List, receive attention and oversight. OMB regularly convenes 

 17GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-13-294SP (Washington, D.C.: Mar. 28, 2013).

18GAO, Defense Acquisitions: Goals and Associated Metrics Needed to Assess Progress 

in Improving Service Acquisition, GAO-13-634 (Washington, D.C.: Jun. 27, 2013).

19Congress took legislative action to reform military acquisition through the Weapon 

Systems Acquisition Reform Act of 2009. In December 2012, we reported on DOD’s 

progress in implementing this act. GAO, Weapons Acquisition Reform Act: Reform Act Is 

Helping DOD Acquisition Programs Reduce Risk, but Implementation Challenges Remain, 

GAO-13-103 (Washington, D.C.: Dec. 14, 2012).

Effective 

Implementation Is 

Essential to 

Successfully 

Addressing Issues on 

the Management 

Agenda
Page 7 GAO-14-436T 

meetings for agencies to provide progress updates on high-risk issues. 

GAO and OMB have agreed to hold a series of meetings on the issues on 

GAO’s High Risk List. The purposes of these meetings are to discuss 

progress achieved and specifically focus on actions that are needed to 

fully address high-risk issues and ultimately remove them from the list. 

These meetings typically include OMB’s Deputy Director for 

Management, agency leaders, as well as myself and have provided a 

useful forum for constructive and productive dialogues.

The President’s Management Agenda also commits to making continued 

progress in managing for results. In that regard, our work has shown that 

progress has been made in implementing the GPRA Modernization Act of 

2010 (GPRAMA).20 For example, the executive branch has taken a 

number of steps to implement key provisions of GPRAMA. The Office of 

Management and Budget (OMB) has developed cross-agency priority 

goals, and agencies developed agency priority goals. Agency officials 

reported that their agencies have assigned performance management 

leadership roles and responsibilities to officials who generally participate 

in performance management activities, including quarterly performance 

reviews for agency priority goals. Further, OMB developed 

Performance.gov, a government-wide website, which provides quarterly 

updates on cross-agency priority goals and agency priority goals.

While the building blocks needed for implementation are being put in 

place, much more needs to be done before the provisions of the act are 

fully useful to decision makers as shown in the following examples.

Executive branch efforts to address crosscutting issues are hampered by 

the lack of a comprehensive list of programs—a key requirement of the 

act. As we have noted, such a list is critical for aligning federal 

government efforts for identifying potential fragmentation, overlap, or 

duplication among federal programs or activities. GPRAMA requires OMB 

to compile and make publicly available a comprehensive list of all federal 

programs identified by agencies, and to include the purposes of each 

program, how it contributes to the agency’s mission, and recent funding 

information. OMB began implementing this provision by directing 24 large 

 20Pub. L. No. 111-352, 124 Stat. 3866 (2011). The acronym "GPRA" in the act's title refers 

to the Government Performance and Results Act of 1993. Pub. L. No. 103-62, 107 Stat. 

285. For our work reviewing implementation, see GAO-13-518.

Developing a 

Comprehensive Inventory 

of Federal Programs
Page 8 GAO-14-436T 

federal agencies to develop and publish inventories of their programs in 

May 2013.

Our preliminary review of these initial inventories identified concerns 

about the usefulness of the information being developed and the extent to 

which it might be able to assist executive branch and congressional 

efforts to identify and address fragmentation, overlap, and duplication. 

OMB’s guidance for developing the inventories provided agencies with 

flexibility to define their programs, such as by outcomes, customers, 

products/services, organizational structure, and budget structure. As a 

result, agencies took various approaches to define their programs—with 

many using their budget structure while others used different approaches 

such as identifying programs by related outcomes or customer focus.

The variation in definitions across agencies will limit comparability among 

like programs. In addition, as reported in our annual reports on 

fragmentation, overlap and duplication, we have found that federal budget 

and cost information is often not available or not sufficiently reliable to 

identify the level of funding provided to programs or activities. For 

example, agencies could not isolate budgetary information for some 

programs because the data were aggregated at higher levels.

OMB identified 12 different program types (e.g., block grants, regulatory, 

credit) for agencies to assign to their programs; however, the list of 

program types does not include tax expenditures, which represent a 

substantial federal commitment.21 OMB does not yet have definitive plans 

on when this effort will be expanded beyond the current 24 agencies to 

cover all other agencies and programs. We plan to further explore these 

issues and report on potential ways that the federal program inventory 

might be improved going forward later this spring.

 21Tax expenditures are reductions in a taxpayer's tax liability that are the result of special 

exemptions and exclusions from taxation, deductions, credits, deferrals of tax liability, or 

preferential tax rates. If the Department of the Treasury estimates are summed, an 

estimated $1 trillion in revenue was forgone from the 169 tax expenditures reported for 

fiscal year 2012, nearly the same as discretionary spending that year. Since 1994, we 

have recommended greater scrutiny of tax expenditures, as periodic reviews could help 

determine how well specific tax expenditures work to achieve their goals and how their 

benefits and costs compare to those of spending programs with similar goals. For more 

information, see our key issues page on tax expenditures at 

http://www.gao.gov/key_issues/tax_expenditures.
Page 9 GAO-14-436T 

Collaboration across agencies, levels of government, or sectors is 

fundamental to addressing many high-risk issues and reducing 

fragmentation, overlap, and duplication. In one example, we have noted 

that better coordination among the more than 30 federal agencies that 

collect, maintain, and use geospatial information could help reduce 

duplication of investments and provide the opportunity for potential 

savings of millions of dollars.

In another example, the Department of Veterans Affairs and DOD operate 

two of the nation’s largest health care systems, together providing health 

care to nearly 16 million veterans, service members, military retirees, and 

other beneficiaries at estimated costs for fiscal year 2013 of about $53 

billion and $49 billion, respectively. As part of their health care efforts, the 

departments have established collaboration sites—locations where the 

two departments share health care resources through hundreds of 

agreements and projects—to deliver care jointly with the aim of improving 

access, quality, and cost-effectiveness of care. However, we found that 

the departments do not have a fully developed and formalized process for 

systematically identifying all opportunities for new or enhanced 

collaboration, potentially missing opportunities to improve health care 

access and quality, and reduce costs.

Many collaborative mechanisms, such as interagency groups and 

specially created interagency offices, do not operate as effectively as they 

could.22 These mechanisms face challenges with issues such as 

identifying a common outcome and managing resources across agency 

lines. Our work has found practices and corresponding effective 

implementation approaches that collaborative mechanisms have used to 

work effectively across agency lines. For example, we have found 

practices and approaches such as agreeing on roles and responsibilities, 

with corresponding accountability for both the agency and the individual 

participants, creating an inventory of agency resources dedicated towards 

interagency outcomes, developing outcomes that represent the collective 

 22For more information on collaborative mechanisms see GAO, Managing for Results: Key 

Considerations for Implementing Interagency Collaborative Mechanisms, GAO-12-1022

(Washington, D.C.: Sept. 27, 2012).

Enhancing the Use of 

Collaborative Mechanisms
Page 10 GAO-14-436T 

interests of participants, and developing performance measures that are 

tied to shared outcomes, can help enhance and sustain collaboration.23

OMB’s 2013 guidance implementing GPRAMA directs agencies, 

beginning in 2014, to conduct annual reviews of progress towards 

strategic objectives—the outcomes or impacts the agency is intending to 

achieve.24 Agency leaders are responsible for assessing progress on 

each strategic objective established in the agency’s strategic plan. 

Effective implementation could help identify and address fragmentation, 

overlap, and duplication issues because as part of the strategic reviews, 

agencies are to identify the various organizations, programs, regulations, 

tax expenditures, policies, and other activities that contribute to each 

objective both within and outside the agency.

Where progress in achieving an objective is lagging, the reviews are 

intended to identify strategies for improvement, such as strengthening 

collaboration to better address crosscutting challenges. If successfully 

implemented in a way that is open, inclusive, and transparent—to 

Congress, delivery partners, and a full range of stakeholders—this 

approach could help decision makers assess the relative contributions of 

various programs that contribute to a given objective. Successful strategic 

reviews could also help decision makers identify and assess the interplay 

of public policy tools that are being used, to ensure that those tools are 

effective and mutually reinforcing, and results are being efficiently 

achieved.

Our annual reports on fragmentation, overlap and duplication have also 

highlighted several instances in which executive branch agencies do not 

collect necessary performance data. In an example from our 2011 annual 

report, we noted that a lack of information on program outcomes for 

economic development, where four agencies administer 80 programs, 

was a longstanding problem.25 We suggested that the four agencies—the 

 23GAO-14-220 and GAO, Results-Oriented Government: Practices That Can Help 

Enhance and Sustain Collaboration among Federal Agencies, GAO-06-15 (Washington, 

D.C.: Oct. 21, 2005).

24OMB, Circular No. A-11, Performance Plans, Performance Reviews, and Annual 

Program Performance Reports. (July 2013).

25GAO-11-318SP. 

Effectively Implementing 

Strategic Reviews

Improving the 

Government’s Capacity to 

Gather and Use Better 

Performance Information
Page 11 GAO-14-436T 

Departments of Commerce, Housing and Urban Development, and 

Agriculture and the Small Business Administration—collect accurate and 

complete information on program outcomes. As of March 2013, the four 

agencies had taken actions to begin to collect better data on program 

performance.

Moreover, our June 2013 report on GPRAMA implementation found that 

agencies continue to face long-standing issues with measuring 

performance, such as obtaining complete, timely, and accurate 

performance information across various programs and activities.26 In one 

example, we reported in June 2013 on two Federal Emergency 

Management Agency (FEMA) grant programs that collect performance 

information and feed the resulting data into a higher-level Department of 

Homeland Security (DHS) goal.27 We found that data were self-reported 

by recipients and FEMA had varied and inconsistent approaches to 

verifying and validating the data. We recommended that FEMA ensure 

that there are consistent procedures in place to verify and validate grant 

performance data. DHS, of which FEMA is a part, concurred with the 

recommendation.

Given the Performance Improvement Council’s responsibilities for 

addressing crosscutting performance issues and sharing performance 

improvement practices, our June 2013 report noted that it could do more 

to examine and address the difficulties agencies face to measuring 

performance across various program types, such as grants and contracts. 

We recommended that OMB work with the Performance Improvement 

Council to develop a detailed approach for addressing these longstanding performance measurement issues. OMB staff agreed with this 

recommendation.

Even in instances where agencies are collecting performance information, 

our periodic surveys of federal managers between 1997 and 2013 have 

found little improvement in managers’ reported use of performance 

information to improve results.28 However, agencies’ quarterly 

 26GAO-13-518.

27GAO, Grants Performance: Justice and FEMA Collect Performance Data For Selected 

Grants, but Action Needed to Validate FEMA Performance Data, GAO-13-552

(Washington, D.C.: Jun. 24, 2013).

28GAO-13-518. 
Page 12 GAO-14-436T 

performance reviews of progress on their priority goals—which began at 

most agencies in 2011 under GPRAMA—show promise as a leadership 

strategy for improving the use of performance information in agencies. Of 

the 12 percent of federal managers who both responded to our survey 

and reported they were very familiar with these reviews, 76 percent 

agreed that their top leadership demonstrated a strong commitment to 

using performance information to guide decision making to a great or very 

great extent. In addition, according to our 2012 survey of performance 

improvement officers at 24 agencies, the majority (21 out of 24 agencies 

required to conduct these reviews) reported that actionable opportunities 

for performance improvement were identified through the reviews at least 

half the time.29

To operate as effectively and efficiently as possible and to make difficult 

decisions to address the federal government’s fiscal challenges, 

Congress, the administration, and federal managers must have ready 

access to reliable and complete financial and performance information—

both for individual federal entities and for the federal government as a 

whole. Overall, significant progress has been made since the enactment 

of key federal financial management reforms in the 1990s; however, our 

February 2014 report on the U.S. government’s consolidated financial 

statements underscores that much work remains to improve federal 

financial management, and these improvements are urgently needed.30

In that report, we concluded that certain material weaknesses31 in internal 

control over financial reporting and other limitations on the scope of our 

 29GAO, Managing for Results: Agencies Have Elevated Performance Management Roles, 

but Additional Training Is Needed, GAO-13-356 (Washington, D.C.: Apr. 16, 2013) and 

Managing for Results: Data-Driven Performance Reviews Show Promise But Agencies 

Should Explore How to Involve Other Relevant Agencies, GAO-13-228 (Washington, D.C.: 

Feb. 27, 2013). 

30GAO, Financial Audit: U.S. Government's Fiscal Years 2013 and 2012 Consolidated 

Financial Statements, GAO-14-319R, (Washington, D.C.: Feb. 27, 2014).

31A material weakness is a deficiency, or a combination of deficiencies, in internal control 

over financial reporting such that there is a reasonable possibility that a material 

misstatement of the entity’s financial statements will not be prevented, or detected and 

corrected, on a timely basis. A deficiency in internal control exists when the design or 

operation of a control does not allow management or employees, in the normal course of 

performing their assigned functions, to prevent, or detect and correct, misstatements on a 

timely basis.

Accelerated Progress 

Is Needed on Major 

Financial 

Management, 

Cybersecurity, and 

Fragmentation, 

Overlap, and 

Duplication Issues
Page 13 GAO-14-436T 

work resulted in conditions that prevented us from expressing an opinion 

on the accrual-based consolidated financial statements as of and for the 

fiscal years ended September 30, 2013, and 2012.32 Three major 

impediments prevented us from rendering an opinion on the federal 

government’s accrual-based consolidated financial statements:

• serious financial management problems at DOD that have prevented its 

financial statements from being auditable — about 33 percent of the 

federal government’s reported total assets as of September 30, 2013, and 

approximately 16 percent of the federal government’s reported net cost 

for fiscal year 2013 relate to DOD, which received a disclaimer of opinion 

on its consolidated financial statements,

• the federal government’s inability to adequately account for and reconcile 

intragovernmental activity and balances between federal entities, and

• the federal government’s ineffective process for preparing the 

consolidated financial statements.

In addition to the material weaknesses underlying the three major 

impediments, we identified other material weaknesses which resulted in 

ineffective internal control over financial reporting for fiscal year 2013. 

These weaknesses are the federal government’s inability to

• determine the full extent to which improper payments occur and 

reasonably assure that appropriate actions are taken to reduce them,

• identify and timely resolve information security control deficiencies and 

manage information security risks on an ongoing basis, and

• effectively manage its tax collection activities.

There are also risks that certain factors could affect the federal 

government’s financial condition in the future, including the following:

 32The accrual-based consolidated financial statements as of and for the fiscal years ended 

September 30, 2013, and 2012 consist of the (1) Statements of Net Cost, (2) Statements 

of Operations and Changes in Net Position, (3) Reconciliations of Net Operating Cost and 

Unified Budget Deficit, (4) Statements of Changes in Cash Balance from Unified Budget 

and Other Activities, and (5) Balance Sheets, including the related notes to these financial 

statements. Most revenues are recorded on a modified cash basis. The 2013, 2012, 2011, 

2010, and 2009 Statements of Social Insurance and the 2013 and 2012 Statements of 

Changes in Social Insurance Amounts, including the related notes, are also included in 

the consolidated financial statements.
Page 14 GAO-14-436T 

• The U.S. Postal Service (USPS) is facing a deteriorating financial 

situation with a lack of liquidity as it has reached its borrowing limit of $15 

billion and finished fiscal year 2013 with a reported net loss of $5 billion.

• The Federal Housing Administration’s (FHA) mortgage insurance portfolio 

continues to grow, and its insurance fund has experienced major financial 

difficulties. FHA’s capital ratio for its Mutual Mortgage Insurance Fund 

remained below the required 2 percent level as of the end of fiscal year 

2013. The ultimate roles of the Federal National Mortgage Association 

(Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie 

Mac) in the mortgage market may further affect FHA’s financial condition.

• The Pension Benefit Guaranty Corporation’s (PBGC) financial future is 

uncertain because of long-term challenges related to PBGC’s governance 

and funding structure. PBGC’s liabilities exceeded its assets by about $36 

billion as of September 30, 2013. PBGC reported that it is subject to 

further losses if plan terminations that are reasonably possible occur.

GAO’s High Risk List includes several of these issues, such as 

information security, USPS’s business model, DOD financial 

management, and the PBGC and FHA insurance programs.33

Increased attention to risks that could affect the federal government’s 

financial condition is made more important because of the nation’s longerterm fiscal challenges. The administration’s long-term fiscal projections—

and our own long-term federal fiscal simulations—show that, absent 

policy changes, the federal government continues to face an 

unsustainable long-term fiscal path. The oldest members of the babyboom generation are already eligible for Social Security retirement 

benefits and for Medicare benefits. Under the administration’s 

projections—and our simulations—spending for the major health and 

retirement programs will increase in coming decades as more members 

of the baby-boom generation become eligible for benefits and the health 

care cost for each enrollee increases. Over the long term, the imbalance 

between revenue and spending built into current law and policy will lead 

to continued growth of debt held by the public as a share of Gross 

Domestic Product (GDP). This situation—in which debt grows faster than 

GDP—means the current federal fiscal path is unsustainable.

Reliable financial and performance information is even more critical as (1) 

federal managers likely face increasingly tight budget constraints and 

 33GAO-13-283. 
Page 15 GAO-14-436T 

need to operate their respective entities as efficiently and effectively as 

possible and (2) decision makers carry out the important task of deciding 

how to use multiple tools (tax provisions, discretionary spending, 

mandatory spending, and credit programs) to address the federal 

government’s fiscal challenges.

Similarly ongoing attention is needed to address issues identified in our 

annual reports on fragmentation, overlap, duplication, and potential cost 

savings and revenue enhancements. Of the 162 areas that we have 

identified in our annual reports, 19 (12 percent) have been fully 

addressed, 111 (69 percent) have been partially addressed, and 31 (19 

percent) have not been addressed.34 More specifically, of the 

approximately 380 actions identified in our annual reports, 87 (23 percent) 

have been fully addressed, 187 (49 percent) have been partially 

addressed, and 104 (28 percent) have not been addressed as of 

December 2013.35 Our reports and GAO’s Action Tracker provide details 

for each of the issues, describing the nature of the problems, what actions 

have been taken to address them, and what remains to be done to make 

further progress.

While agencies have continued to make progress, important opportunities 

have yet to be pursued. The details in our reports, along with successful 

implementation by agencies and continued oversight by Congress, can 

form a solid foundation for progress to address risks, improve programs 

and operations, and achieve greater efficiencies and effectiveness.

In 2012, OMB collected information from the responsible agencies on the 

steps they have taken to address our suggested actions. To ensure 

sustained leadership attention on these actions, OMB also asked the 

performance improvement officers from responsible agencies to monitor 

the progress being made. GAO and OMB staff meet throughout the year 

to discuss the issues identified by our work and the extent to which the 

administration is working to address the issues. These meetings have 

been helpful in monitoring progress. However, given that issues of 

fragmentation, overlap, and duplication often involve multiple agencies, 

the discussions need to be elevated to include more senior officials who 

 34As of December 2013, one area remains under review.

35We will update the status of these actions when we release our next annual report in 

April 2014.
Page 16 GAO-14-436T 

have the responsibility and authority for resolving the crosscutting issues 

identified.

In addition to financial management and widespread fragmentation, 

overlap, and duplication issues, the federal government must address 

pressing challenges with its cybersecurity. As computer technology has 

advanced, federal agencies and our nation’s critical infrastructures such 

as power distribution, water supply, telecommunications, and emergency 

services have become increasingly dependent on computerized 

information systems and electronic data to carry out operations and to 

process, maintain, and report essential information. The security of these 

systems and data is essential to protecting national security, economic 

prosperity, and public health and safety. We have reported that (1) cyber 

threats to systems supporting government operations and critical 

infrastructure were evolving and growing, (2) cyber incidents affecting 

computer systems and networks continue to rise, and (3) the federal 

government continues to face challenges in a number of key aspects of 

its approach to cybersecurity, including those related to protecting the 

nation’s critical infrastructure.36 For these reasons, federal information 

security has been on GAO’s list of high-risk areas since 1997; in 2003, we 

expanded this high-risk area to include cyber critical infrastructure 

protection.37

The federal government has taken a variety of actions that are intended 

to enhance federal and critical infrastructure cybersecurity. For example, 

the government issued numerous strategy-related documents over the 

last decade, many of which addressed aspects of the challenge areas we 

identified. The administration also took steps to enhance various 

cybersecurity capabilities, including establishing agency performance 

goals and a tracking mechanism to monitor performance in three crossagency priority areas.38 In February 2013, the president issued 

Presidential Policy Directive 21 on critical infrastructure security and 

resilience and Executive Order 13,636 on improving critical infrastructure 

 36GAO, Cybersecurity: National Strategy, Roles, and Responsibilities Need to Be Better 

Defined and More Effectively Implemented, GAO-13-187 (Washington, D.C.: Feb. 14, 

2103).

37GAO-13-283.

38The three cross-agency priority areas are implementing Trusted Internet connections, 

continuous monitoring of federal information systems, and strong authentication.
Page 17 GAO-14-436T 

cybersecurity. Improving these capabilities is a step in the right direction, 

and their effective implementation can enhance federal information 

security and the cybersecurity and resilience of our nation’s critical 

infrastructure.

However, more needs to be done to accelerate the progress made in 

bolstering the cybersecurity posture of the nation and federal government. 

The administration and executive branch agencies need to implement the 

hundreds of recommendations made by GAO and agency inspectors

general to address cyber challenges, resolve known deficiencies, and 

fully implement effective information security programs. Until then, a 

broad array of federal assets and operations will remain at risk of fraud, 

misuse, and disruption, and the nation’s most critical federal and private 

sector infrastructure systems will remain at increased risk of attack from 

our adversaries. Congress is considering several bills that are intended, if 

enacted into law and effectively implemented by the executive branch, to 

improve cyber information sharing and the cybersecurity posture of the 

federal government and the nation.

In closing, our nation’s long-term fiscal challenges underscore the need 

for the federal government to operate in an efficient and effective manner. 

To do so, the federal government must address a number of significant 

management and governance challenges—many highlighted by our High 

Risk List and our annual reports on fragmentation, overlap, and 

duplication. Our work has also highlighted a variety of approaches the 

executive branch and Congress could take to resolve these issues 

moving forward. In doing so, it is vital that both branches of government 

demonstrate the sustained leadership commitment needed to address 

these challenges. Given the crosscutting nature of many of these 

challenges, it will be particularly important for OMB to play a leadership 

role in the Executive Branch.

Chairman Carper, Ranking Member Dr. Coburn, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have at this time.

For further information regarding this testimony, please contact J. 

Christopher Mihm, Managing Director, Strategic Issues, at (202) 512-

6806 or mihmj@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this 

statement.

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